MAY 20, 2015 DISCLOSURE NOTICE
The purpose of this notice is to disclose certain practices of JPMorgan Chase & Co. and its affiliates (together, “JPMorgan Chase” or the “Firm”) when it acted as a dealer, on a principal basis, in the spot foreign exchange (“FX”) markets. We want to ensure that there are no ambiguities or misunderstandings regarding those practices.
To begin, conduct by certain individuals has fallen short of the Firm’s expectations. The conduct underlying the criminal antitrust charge by the Department of Justice is unacceptable. Moreover, as described in our November 2014 settlement with the U.K. Financial Conduct Authority relating to our spot FX business, in certain instances during the period 2008 to 2013, certain employees intentionally disclosed information relating to the identity of clients or the nature of clients’ activities to third parties in order to generate revenue for the Firm. This also was contrary to the Firm’s policies, unacceptable, and wrong. The Firm does not tolerate such conduct and already has committed significant resources in strengthening its controls surrounding our FX business.
But nobody went to jail. Then there's the unmentionable crime against humanity by JPMorgan et al---the price management scheme against the precious metals in particular---and commodities in general. This disclosure notice appeared on the JPMorgan website on Wednesday---and it's courtesy of Dan Lazicki. I borrowed the headline from a Zero Hedge article.
In an interview with Democracy Now!, Rolling Stone journalist Matt Taibbi spoke about the recent news surrounding the five major banks – Citigroup, JPMorgan Chase, Barclays, Royal Bank of Scotland and UBS – who pled guilty to rigging the price of foreign currencies and interest rates. Their fines amount up to more than $5 billion.
“They were monkeying around with the prices of every currency on Earth,” Taibbi told Amy Goodman. “So, if you can imagine that anybody who has money, which basically includes anybody who’s breathing on the planet, all of those people were affected by this activity. So if you have dollars in your pocket, they were monkeying around with the prices of dollars versus euros, so you might have had more or less money fractionally, depending on all of this manipulation, every single day.”
There's a 33:15 minute video interview, but there's also a transcript. This excellent commentary by Matt appeared on the alternet.org Internet site on Thursday---and it's the first offering of the day from Roy Stephens.
Wall Street banks are facing the threat of new and more damaging allegations about their rigging of foreign exchange markets, as New York's banking regulator intensifies a probe into computer-driven currency trading -- raising the prospect that the total penalties arising from the scandal will exceed the $10 billion already paid.
The New York Department of Financial Services, run by Benjamin Lawsky, has become increasingly convinced that banks have been systematically abusing forex markets through the use of automated trades driven by computer algorithms, according to people familiar with its investigation.
Findings from the probe may indicate more widespread market abuse than U.S. and U.K. authorities disclosed on Wednesday, when detailing their settlement with six global banks, the people added. They pointed out that this $5.6 billion settlement related to allegations of market manipulation by bank employees -- but Mr Lawsky's probe covers electronic trading, which accounts for the majority of forex transactions.
The above three paragraphs are all that's posted in the clear from this Financial Times story from yesterday---and I found it embedded in a GATA release.
Yesterday, in the aftermath of the latest settlement by the world's biggest banks, who finally admitted they have criminally rigged virtually all markets since the Great Financial Crisis (and prior) despite promising repeatedly they would not do that after having been caught time and again and punished with ever "harsher" wrist slaps, we wrote that the "Public Is Confused Why World's Biggest Banks Admitting Criminal Fraud, Leads To Public Yawns."
It appears the public is not the only one who is confused, or yawning, that yet again banks get away with just another penalty (to be paid by their shareholders) and zero jail time for the perpetrators despite what is supposedly "criminal" rigging: none other than a SEC regulator working for the same enforcer who "punished" the Too Big To Prosecute banks only to immediately grant them waivers to continue business as usual, is just as confused.
Here, two weeks after SEC commissioner Cara Stein raged that the SEC would turn a blind eye to Germany's Deutsche Bank for a "Decade Of Lying, Cheating, And Stealing", is her dissenting opinion with the SEC settlement, this time broadening her anger to include all the banks, not just the German one.
This 'dissenting statement' appeared in this Zero Hedge article that appeared on their website at 7:58 a.m. EDT on Friday morning---and it's worth reading if you have the time. It's the second offering of the day from Dan Lazicki. There was more commentary on this in a story that was posted on the wallstreetonparade.com Internet site yesterday---and it's headlined "DoJ Calls Out UBS Rap Sheet; Ignores Homegrown Citigroup’s Rap Sheet"---and I thank Richard O'Mara for digging up that one for us. It's worth reading as well.
The U.S. Federal Reserve is likely to stick with plans to raise interest rates later this year, with progress towards its employment and inflation goals helping allay concerns over the economy's recent weakness, current and former Fed officials say.
Fed Chair Janet Yellen, who on Friday will talk about the economy's prospects, is expected to acknowledge the recent sluggishness, including near stagnant performance in the first few months of the year.
But she will also probably repeat the mantra that better days should follow a temporary swoon, and highlight the economy's steady job growth, keeping the Fed on track for its first policy tightening in nearly a decade.
Hours ahead of her speech inflation showed a flicker of life, with the Consumer Price Index, once stripped of volatile food and energy components, recording a 0.3 percent rise in April. Though the Fed uses another measure for its 2 percent target, the CPI report on Friday showed prices increasing across a broad set of items, giving the Fed "affirmation core trends are moving their way," said TD Securities analyst Eric Green. "In effect, inflation is not an obstacle to tightening."
Well, dear reader, I'll believe this rate increase when I see it. This Reuters article, filed from New York, showed up on their Internet site at 11:47 a.m. EDT yesterday---and I thank Orlando, Florida reader Dennis Mong for sharing it with us.
The root cause of a complex predicament is actually rather uncomplicated: it’s called inflationism. And there’s a reason why I am not the least bit optimistic. Despite centuries of history, we’ve somehow bought into the fallacy that “money printing” can resolve structural issues (financial, economic and social). In the face of overwhelming contrary evidence, central bankers and their supporters have clung to the sophistry that they can raise prices levels – in the real economy and securities markets – and that such inflation supports system growth and stability. Central banks have over-promised and have been too content to feed fanciful notions of their omnipotence and overwhelming power. Progressively bolder “activist” central bankers were afforded way too much discretion to experiment. In the end, their inflationary policies primarily inflated asset prices and securities market speculative Bubbles. And each policy error – accommodating or, worse yet, orchestrating a new Bubble – invariably led to only bigger blunders. The greater the boom and bust the more outlandish the subsequent reflationary cycle and attendant Bubbles.
For today’s readers and for the reader in 2065, it is imperative to appreciate that the Fed (and global central bankers more generally) is today trapped. Borrowing from Larry Lindsey, “We’re at the point of absurdity.” Yet normalization from absurd rates and central bank monetization is indefinitely deferred because of fears of bursting Bubbles. The great danger of central bank controlled, market-based finance has come to fruition: central bankers see no alternative than to allow Bubbles to run wild. And unhinged markets will do what unsound markets do: go to self-reinforcing precarious excess.
The nature is unclear and the course always uncertain. The end game, however, is never in doubt. Inflationism is seductive – it sets an incredibly powerful trap. And it inevitably reaches the point of no return. If only the Fed would quickly mend its ways and begin normalizing rates. I very much wish it wasn’t too late. But these global Bubbles are not going to tolerate anything like normality.
Doug's weekly Credit Bubble Bulletin is always a must read for me---and this one is no exception. I thank reader U.D. for passing it around early yesterday evening.
More than 250 tech companies have signed a letter demanding greater transparency from Congress and decrying the broad regulatory language in leaked parts of the controversial Trans-Pacific Partnership trade bill.
The TPP would create an environment hostile to journalists and whistleblowers, said policy directors for the Electronic Frontier Foundation and Fight for the Future, co-authors of the letter. “TPP’s trade secrets provisions could make it a crime for people to reveal corporate wrongdoing ‘through a computer system’,” says the letter. “The language is dangerously vague, and enables signatory countries to enact rules that would ban reporting on timely, critical issues affecting the public.”
Among the signatories is activist, sci-fi author and The Guardian tech columnist Cory Doctorow. “Democracies make their laws in public, not in smoke-filled rooms,” Doctorow wrote. “If TPP’s backers truly believed that they were doing the people’s work, they’d have invited the people into the room. The fact that they went to extreme, unprecedented measures to stop anyone from finding out what was going on – even going so far as to threaten Congress with jail if they spoke about it – tells you that this is something being done to Americans, not for Americans.”
This story, which originally appeared on The Guardian website, was reposted on the alternet.org Internet site on Thursday---and it's the second contribution of the day from Roy Stephens.
Venezuelans are dumping their rapidly-depreciating currency at a quicker pace, leading to a staggering plunge in its free-market value, as the crisis-plagued economy edges closer to an outbreak of hyperinflation.
DolarToday, a widely followed website that tracks exchanges made near the Colombian border, reported today that the bolivar had lost a quarter of its value over the last seven days.
Everyone in smartphone-obsessed Caracas seemed to learn of the crash at the same time as the DolarToday app, a ubiquitous tool in the South American country, sent out a series of messages announcing the new rates under the headline "Hyperinflation!"
Venezuelan currency was trading at around 420 bolivars per dollar Friday afternoon, according to the site. That was down from 300 bolivars per dollar on May 14 and 173 at the start of the year.
This AP story from yesterday afternoon EDT was filed from Caracas---and was subsequently picked up by the news.yahoo.com Internet site---and is a must read. I found it on the gata.org Internet site last night.
The Bank of England has accidentally revealed that it has set up a task force to look at how a U.K. exit from the European Union will affect the economy.
"Project Bookend" - as the Bank has dubbed the initiative - will be led by Sir Jon Cunliffe, deputy governor and a board member at the Prudential Regulatory Authority.
However, it is how the plans have been revealed that will cause embarrassment at the central bank.
Details of the task force, as well as how Bank officials should deal with media questions regarding a "Brexit", were accidentally e-mailed to The Guardian.
The e-mail was sent from Sir Jon's secretary to four senior executives at the Bank - Iain de Weymarn, Governor Mark Carney's private secretary; Nicola Anderson, head of risk assessment in the financial stability department; Phil Evans, director of the international division; and Jenny Scott, executive director communications. However, it was also accidentally forwarded to an editor at The Guardian.
You couldn't make this stuff up! This news item appeared on the telegraph.co.uk Internet site at 7:45 p.m. BST in London yesterday evening, which was 2:45 p.m. EDT in Washington. I thank South African reader B.V. for sending it our way.
At an 18th-century mansion in England’s countryside last week, current and former spy chiefs from seven countries faced off with representatives from tech giants Apple and Google to discuss government surveillance in the aftermath of Edward Snowden’s leaks.
The three-day conference, which took place behind closed doors and under strict rules about confidentiality, was aimed at debating the line between privacy and security.
Among an extraordinary list of attendees were a host of current or former heads from spy agencies such as the CIA and British electronic surveillance agency Government Communications Headquarters, or GCHQ. Other current or former top spooks from Australia, Canada, France, Germany and Sweden were also in attendance. Google, Apple, and telecommunications company Vodafone sent some of their senior policy and legal staff to the discussions. And a handful of academics and journalists were also present.
According to an event program obtained by The Intercept, questions on the agenda included: “Are we being misled by the term ‘mass surveillance’?” “Is spying on allies/friends/potential adversaries inevitable if there is a perceived national security interest?” “Who should authorize intrusive intelligence operations such as interception?” “What should be the nature of the security relationship between intelligence agencies and private sector providers, especially when they may in any case be cooperating against cyber threats in general?” And, “How much should the press disclose about intelligence activity?”
This interesting story showed up on The Intercept website yesterday morning EDT---and it's another contribution from Roy Stephens.
The president of aerospace giant and Welsh wing-maker Airbus says the firm would reconsider U.K. investment if Britain left the European Union.
Paul Kahn said Britain must compete for international investment.
The company employs 6,000 people at its wing factory at Broughton, Flintshire, and a further 4,000 at Filton, Bristol.
The comments follow the head of JCB stating Britain should not fear an E.U. exit. It employs about 500 people at its Wrexham plant.
But speaking to the BBC, the Airbus president said the best way to guarantee continuing investment was "by remaining part of the E.U."
This BBC article was posted on their website on Thursday, but I saved it for today because there's a youtube.com video about how this company makes wings for the new Airbus 380. I watched it a couple of weeks ago---and if the manufacturing process fascinates you, as it does me, this video is a must watch---and it's linked here. By the way, this wing plant in Wales is not going anywhere, with or without the U.K. being in the E.U. The reader that send me this story wishes to remain anonymous.
Back in 1966, Lunar 9 was the first spacecraft to achieve a controlled landing on the Moon, England won the World Cup, and Italy opened the first section of the Salerno to Reggio Calabria motorway.
In the intervening half-century space missions have gone on to greater things, England have struggled to repeat their success, and, incredibly, Italy is still plodding on with the construction of the A3, “the eternally unfinished autostrada”, as it’s known.
Construction of the 443km stretch of road, which is supposed to run from Salerno, just south of Naples, down to the capital of the Calabria region, in the toe of the Italian boot, has been plagued by faulty construction, delays and scandal. Campaigners say that during this time it’s come to look like the incarnation of everything that’s wrong with the country, hamstrung by corruption and bad management. “It’s a symbol of how public works are in Italy,” said Stefano Zerbi, spokesman for the national consumer organisation, Codacons.
It’s not lost on anyone that the road stretches from Campania, the regional home of the Camorra crime syndicate, and then passes through the ‘Ndrangheta badlands, including towns such as Rosarno and Gioia Tauro.
Obviously I don't know much about it Italy, because my jaw hit the floor, as I couldn't believe what I was reading. Truth is really stranger than fiction---and for that reason you should seriously consider reading this. It appeared on the independent.co.uk Internet site on Wednesday---and for obvious reasons had to wait for today's column. Once again I thank Roy Stephens for sharing it with us.
The Eastern Partnership summit in Riga ended with growing divisions and no promises on issues of visa-free travel, which worried some members.
The European Union's Eastern Partnership summit with six ex-Soviet states ended with little progress as the partnership countries were divided in their aspirations for European integration and their goals for visa-free travel.
The representatives of Armenia, Azerbaijan and Belarus refused to sign the initial document which stated that the summit condemned Russia's reunification with Crimea, which the document called an "illegal annexation." Ukrainian President Petro Poroshenko, who was waiting for a "signal" from the E.U. on a visa-free regime, was told by German Chancellor Angela Merkel that the E.U. is not ready for it.
This news item was posted on the sputniknews.com Internet site at 5:08 p.m. Moscow time on their Friday afternoon, which was 10:08 a.m. EDT in Washington. It's another contribution to today's column from Roy Stephens. There was a Bloomberg story on this Riga Summit. It's headlined "Greek Talks Break Up as Earlier Optimism Evaporates"---and it showed up on their Internet site at 5:05 p.m. Denver time on Thursday afternoon. I found it in yesterday's edition of the King Report.
Just when events are said to be winding down in the Ukraine Civil War we see that after Assistant Sec. State, Nuland’s visit to Moscow last weekend and her assurances that Kiev is on side with Minsk2, the Donetsk Airport area just a day later came under the heaviest shelling for months.
And John Batchelor and Stephen F. Cohen make an effort to find out what is really happening through the “fog of diplomacy” with this process. Last week they see three main features of interest and new very serious global concerns for the New Great Game:
1) Dimitry Medvedev, the Russian Prime Minister disallows use for USA to supply Afghanistan from Russian Federation territory.
2) Kyiv is claiming the capture of two Russian soldiers.
3) And probably most important, a positional statement from the Carlisle Barracks, the United States Army War College, that essentially told the White House that a containment policy against Russia will not work and it is time to consider one of cooperation and competition. At present, as the parties work out strategies the United States, NATO, Russian and Europe, our esteemed pundits here try to determine whether the Western players, especially Washington, are truly backing away from supporting Kyiv or whether this is a ploy.
If you're following events in the Ukraine, this 39:50 minute audio interview is certainly worth your while. It was posted on the johnbatchelorshow.com Internet site on Tuesday---and I thank Larry Galearis for bringing it to our attention.
On April 26 Russia’s main national TV station, Rossiya 1, featured President Vladimir Putin in a documentary to the Russian people on the events of the recent period including the annexation of Crimea, the U.S. coup d’etat in Ukraine, and the general state of relations with the United States and the E.U. His words were frank. And in the middle of his remarks the Russian former KGB chief dropped a political bombshell that was known by Russian intelligence two decades ago.
Putin stated bluntly that in his view the West would only be content in having a Russia weak, suffering and begging from the West, something clearly the Russian character is not disposed to. Then a short way into his remarks, the Russian President stated for the first time publicly something that Russian intelligence has known for almost two decades but kept silent until now, most probably in hopes of an era of better normalized Russia-U.S. relations.
Putin stated that the terror in Chechnya and in the Russian Caucasus in the early 1990’s was actively backed by the CIA and western Intelligence services to deliberately weaken Russia. He noted that the Russian FSB foreign intelligence had documentation of the U.S. covert role without giving details.
What Putin, an intelligence professional of the highest order, only hinted at in his remarks, I have documented in detail from non-Russian sources. The report has enormous implications to reveal to the world the long-standing hidden agenda of influential circles in Washington to destroy Russia as a functioning sovereign state, an agenda which includes the neo-nazi coup d’etat in Ukraine and severe financial sanction warfare against Moscow. The following is drawn on my book, “The Lost Hegemon” to be published soon…
This is your big read of the day---and is an absolute must read for any serious student of the New Great Game. It put in an appearance on the journal-neo.org Internet site a week ago Friday and, not surprisingly, it's courtesy of Roy Stephens---and is another piece that had to wait for a spot in my Saturday missive.
As China's New Silk Road project is seemingly aimed at a "revolutionary change" in the global economic map, it may lead to a serious confrontation between the East and the West over Eurasian dominance, says U.S. analyst Robert Berke.
Washington's new Trans-Pacific Partnership (TPP) initiative that leaves out both China and Russia, has clearly demonstrated that U.S. participation in China's New Silk Road project seems unlikely while its "opposition is all but certain," American energy financial analyst Robert Berke stated in a recent article on Oilprice.com.
"The [New Silk Road] project aims at no less than a revolutionary change in the economic map of the world. It is also seen by many as the first shot in a battle between east and west for dominance in Eurasia," the financial analyst stressed.
The New Silk Road is expected to connect Asia, Europe and Africa.
This article was posted on the sputniknews.com website at 6:27 p.m. Moscow time on their Friday evening---and it's definitely worth reading. Once again I thank Roy Stephens for digging it up for us.
China tried to electronically jam U.S. drone flights over the disputed South China Sea in order to prevent surveillance on man-made islands Beijing is constructing as a part of an aggressive land reclamation initiative, U.S. officials said.
Global Hawk long-range surveillance drones were targeted by jamming in at least one incident near the Spratly Islands, where China is building military facilities on Fiery Cross Reef, the Washington Free Beacon reported.
That statement follows Thursday reports that the Chinese navy warned a U.S. surveillance plane to leave the same area eight times in an apparent effort to establish and enforce a no-fly zone, a demand Washington rejected.
This news item appeared on the sputniknews.com Internet site at 11:00 p.m. Moscow time on their Friday evening, which was 4 p.m. EDT. It's the final contribution of the day from Roy Stephens---and I thank him on your behalf.
Two of Hong Kong's best-performing stocks plunged more than 40 percent Thursday, a day after a mysterious crash of almost 50 percent in Chinese solar firm Hanergy that saw almost $20 billion wiped off its market value.
Goldin Financial sank 43.34 percent to HK$17.48 and Goldin Properties crashed 40.91 percent to HK$14.36, after soaring more than 300 percent since the start of January, according to Bloomberg News.
The companies, which have interests ranging from property development in Hong Kong and China to vineyards in California and France are owned by Chinese tycoon Pan Sutong.
The dramatic sell-off came after a 47 percent dive in Beijing-based solar energy firm Hanergy Thin Film Power (HTF).
This business-related AFP story, filed from Hong Kong on Thursday local time, ended up on the terradaily.com Internet site---and it's worth skimming.
Listen to Eric Sprott share his views on Friday’s release of economic data, BitGold’s recent merger with Gold Money, the lending of more funds to Greece by the European Central Bank, and the smash in gold on yesterday morning.
This 11:18 minute audio clip with host Geoff Rutherford was posted on the sprottmoney.com Internet site yesterday evening.
BitGold Inc., a platform for savings and payments in gold, announces that it has entered into an acquisition Agreement to purchase the operating and intellectual property assets of GoldMoney Network Ltd., subject to regulatory approvals and other customary closing conditions.
With over C$1.5 billion in assets under vault management, GoldMoney is among the world's largest private managers of precious metal assets, renowned for its innovation and integrity in the gold market.
Upon closing of the acquisition agreement, BitGold will acquire the intellectual property and operating assets of GoldMoney in exchange for the issuance of 11,169,794 common shares in BitGold, valuing the transaction at C$51.9 million based on BitGold's C$4.65 closing price on May 21. The transaction is expected to close within 60 days.
This news item, filed from Toronto, showed up on the businesswire.com Internet site yesterday at 07:50 a.m. EDT---and I found it embedded in a GATA release.
Welcome to another episode of understanding how mainstream consultancy firms (the World Gold Council, GFMS, CPM Group, Precious Metals Insights) understate Chinese gold demand. One of their main arguments is that hundreds if not thousands of tonnes are tied up in Chinese Commodity Financing Deals (CCFDs). As it was first stated by the World Gold Council (China’s Gold Market Progress And Prospects, April, 2014):
No statistics are available on the outstanding amount of gold tied up in financial operations [CCFDs] linked to shadow banking but Precious Metals Insights believes it is feasible that by the end of 2013 this could have reached a cumulative 1,000 tonnes.
Many mainstream news outlets, such as Reuters and the Financial Times, copied this segment, writing something along the lines of “1,000 tonnes is tied up in financing deals, it’s all a fraud and when this will be unwound the gold will flush the Chinese market”. In reality there was not 1,000 tonnes tied up in financing deals in 2013, as was portrayed by the WGC report.
This rather brief commentary appeared on the bullionstar.com Internet site early yesterday morning Singapore time---and I thank Koos for passing it around. It's worth reading.
Austria is repatriating gold from the vaults at the Bank Of England (BOE) at this very moment, according to Kronen Zeitung. The OeNB (central bank of the Republic of Austria) stored 82 % of its 280 tonnes at the depository in England. It will start by bringing back 110 tonnes to Austria, to eventually have 50% on its own soil.
This was to be expected as Austria has steadily working to move more of its official gold reserves from unallocated to allocated accounts in recent years, and additionally reduced its gold leased out by a staggering 60%.
This is another brief commentary from Koos---and it appeared on the bullionstar.com Internet yesterday afternoon Singapore time. It's definitely worth reading as well. Here's the Zero Hedge spin on this story---and it's headlined "Austria Confirms Faith in Fiat Fading: Repatriates 110 Tons of Gold From BoE"---and I thank reader 'David in California' for passing that one around yesterday morning.
On Friday at Bloomberg’s own Precious Metals forum in London, Hoffmann gave a further short talk setting out the hypothesis – seeing the possibility of China going down this route as a possible Black Swan scenario. While, in a short article released at the event he admits that the backing of the yuan fully by gold is an exercise that is highly unlikely and that in any case the Chinese government would not wish to have its monetary policy hands tied to the extent a traditional gold standard would suggest. Indeed he admits that while the debate on this is an interesting one, ‘the idea of China on the gold standard is likely to remain in the alchemist’s lab for now’.
So what Hoffmann has done is to bring the idea of a Chinese introduction of some form of gold standard into the debate and for that he should be praised rather than vilified by those who find the whole idea counter to their own views. The Chinese are indeed capable of springing surprises on the West. As pointed out earlier the Chinese have a different way of thinking than us westerners. They tend to operate with the kind of long term game plan no longer even considered in most capitalist countries and with a centrally controlled economy are perhaps far better placed to implement economic reforms which are to their ultimate benefit which might be considered impossible in the Western thought train.
So while a Chinese return to some kind of gold standard may be extremely unlikely, one perhaps should not write the idea off as totally impossible, and Hoffmann has done us a favour in getting us to think outside the box ourselves.
This short commentary by Lawrie was posted on his own website yesterday---and it's worth the read as well.
Consumer Comfort is now the lowest it has been since Dec 2014 as Bloomberg's sentiment index continues to track the pain of higher gas prices better than the gain of higher stock prices. This is the biggest 6-week plunge in sentiment since Oct 2013. What is more worrisome is 'hope' is plunging. Economic Expectations fell by the most since Oct 2013 - the government shutdown - having fallen for 3 straight months. It appears the trickle-down popularity of seeing a Green Dow print every night on the news does not make the average Joe feel any better about the world after all???
This 2-chart Zero Hedge piece from 10:07 a.m. EDT on Thursday morning is worth thirty seconds of your time---and I thank Dan Lazicki for today's first story.
SUMMING IT ALL UP FIRST - WE HIT RECORD HIGHS TODAY ON THE LOWEST VOLUME OF THE YEAR AS GLOBAL MACRO DATA MISSED EN MASSE... that is all
In the last 12 hours - China PMI Miss/Drop, Japan All Activity Index Miss/Drop, France Services PMI Miss, German Manufacturing & Services PMI Miss/Drop, Eurozone Composite PMI Miss/Drop, Chicago Fed National Activity Index Miss/Drop, Initial Jobless Claims Miss/Drop, U.S. Manufacturing PMI Miss/Drop, Bloomberg Consumer Comfort Plunge, Philly Fed Miss/Drop, E.U. Consumer Confidence Miss/Drop, Existing Home Sales Miss/Drop, Kansas City Fed Collapsed... and Stocks Surge...
This Zero Hedge piece appeared on their website about thirty-five minutes after the markets closed yesterday---and if you're a chart junkie, this story is for you. It's the second offering in a row from reader Dan Lazicki.
David Stockman explains why the stock and bond market could be on the verge of a collapse.
This 3:33 minute CNBC video clip was posted on their website about noon on Thursday---and it's the third contribution in a row from Dan L.
A surge in bank repossessions of properties last month pushed overall foreclosure activity across the United States to an 18-month high, according to a report by industry firm RealtyTrac released on Thursday.
Overall, 125,875 homes across the country were at some point in the foreclosure process in April, a 3 percent jump from March. The increase drove foreclosure activity up 9 percent from year-ago levels, RealtyTrac said.
April's jump in foreclosure activity, which includes foreclosure notices, scheduled auctions and bank repossessions was mainly driven by a 25 percent rise in repossessions.
A total of 45,168 homes were reclaimed by banks in April, up 50 percent from a year ago, bringing bank repossessions to their highest levels in 27 months.
This news item was posted on the newsmax.com Internet site at 10:23 a.m. EDT on Thursday morning--and I thank West Virginia reader Elliot Simon for sending it along.
Investors yawned at the news Wednesday that five of the world’s biggest banks, including JPMorgan Chase & Co. and Citigroup Inc., agreed to plead guilty in a currency-rigging probe. They’re among six banks that will pay $5.8 billion in fines.
Barely more than a year ago, criminal charges against major U.S. banks were considered unthinkable, with lawyers and analysts viewing felony convictions as a death sentence and a threat to the financial system. Now, by granting waivers allowing lenders to keep operating even after a felony plea, the government has managed to punish firms while protecting them from fatal consequences.
“This is the first time you had Citigroup, JPMorgan or any U.S. bank plead guilty essentially to criminal conduct -- this is a bad day for American finance,” Mike Mayo, an analyst at CLSA Ltd., said in a televised interview with Bloomberg. “Having said that, this is more backward-looking than forward-looking.”
Like I said yesterday, dear reader, until the guys in the corner suites and the boardrooms are looking at large numbers of years in orange jump suits at the Crowbar Hilton, nothing will change. These are just licensing fees---felony convictions or not. This news item appeared on the Bloomberg Internet site at 3:30 p.m. Denver time Thursday afternoon---and it's the second offering in a row from Elliot Simon.
After more than 200 years of operation, yesterday JPMorgan Chase became an admitted felon. That action for foreign currency rigging came less than two years after the bank was charged with two felony counts and given a deferred prosecution agreement for aiding and abetting Bernie Madoff in the largest Ponzi fraud in history. The felony counts came amid three years of non-stop charges against JPMorgan Chase for unthinkable frauds: from rigging electric markets to ripping off veterans to charging credit card customers for fictitious credit monitoring and manipulating the Libor interest rate benchmark.
Against this backdrop of a serial crime spree on the part of employees on multiple continents and coast to coast in the United States, JPMorgan released a statement yesterday regarding the bank pleading guilty to a felony charge for engaging in the rigging of foreign currency trading, calling it “principally attributable to a single trader.” In the statement, Dimon says the bank has a “historically strong culture.”
Dimon is, if nothing else, a master of the grand illusion.
This short essay put in an appearance on the wallstreetonparade.com Internet site yesterday sometime---and I thank Richard O'Mara for bringing it to our attention.
While soaring stock prices do nothing to boost the economy, because as 7 years of hard facts have shown, the only thing "trickle down" QE has done is forced economists to jump the shark and demand not one but two seasonal adjustments to goal seek collapsing economic data, the S&P hitting new all time highs on a daily basis has certainly succeeded in one thing: pushing inequality around the globe, and especially in the US, to new record highs.
And earlier today the latest OECD report confirmed just that, when it reported that gap between the rich and poor in most of the world's advanced economies is at record levels.
In most of the 34 countries in the Organisation for Economic Cooperation and Development the income gap is at its highest level in three decades, with the richest 10 percent of the population earning 9.6 times the income of the poorest 10 percent.
In the 1980s this ratio stood at 7 to 1, the OECD said in a report.
This longish article, also from the Zero Hedge website yesterday morning, is also courtesy of Dan Lazicki.
“Sometimes ISDAfix is manipulated.”
Those words, taken from an e-mail written by a Barclays Plc options trader, came back to haunt the bank Wednesday as it settled U.S. government allegations that it attempted over five years to rig one of the world’s most important rate benchmarks.
The Commodity Futures Trading Commission released some of the more than 1 million e-mails and recorded phone calls gathered during its nearly three-year investigation to show how the attempted manipulation worked.
It was a simple process, according to the CFTC: Barclays traders told their brokers to buy or sell as many interest-rate swaps as needed just before 11 a.m. New York time to push the benchmark in the desired direction.
This Bloomberg article appeared on their website at 2:59 p.m. Mountain Daylight time on Wednesday afternoon---and my thanks go out to Howard Wiener for finding it for us.
Europe's creditor powers have started to wobble. Berlin, Paris and Brussels are coming to the grim conclusion that Greece may not capitulate as expected, and time is running out fast.
Athens is now warning openly that the "moment of truth" will come on June 5, when the country faces default on a €300m payment to the International Monetary Fund, unless the EU authorities hand over the next tranche of bail-out cash.
It would be hazardous to bet the integrity of monetary union on the assumption that this is just a bluff.
This must read Ambrose Evans-Pritchard commentary appeared on the telegraph.co.uk Internet site at 9:30 p.m. BST on Wednesday evening---and I thank Roy Stephens for sharing it with us.
Foreign corporations from countries including Germany, China and Russia are lining up to buy Greek state assets as the country struggles to pay its European creditors.
The sell-off includes major parts of Greece's infrastructure such as airports, ports, motorways and utilities., The website of the agency leading the government's privatisation drive details a host of real estate ready to be sold off, with deals listed as either 'in progress', 'rolling ahead' or 'completed'.
The move marks a U-turn from the ruling Left-wing Syriza party, who had previously resisted the privatisation programme imposed as part of the conditions attached to Greece's €245bn bailout from the so-called troika of the IMF, European Central Bank (ECB) and European Commission.
This story appeared on the europe.newsweek.com Internet site at at 6:35 p.m. on Wednesday. No time zone was stated, so it can be assumed that it's EDT. A reader who wishes to remain anonymous sent it our way yesterday.
Greece has revealed it’s been asked by the U.S. to prolong anti-Russia sanctions. However, Athens stressed Russia is a strategic ally and the ‘sanction war’ is causing it an estimated loss of €4 billion a year.
"I was asked to support the prolongation of the sanctions, particularly in connection with Crimea. I explained the Ukrainian issue was very sensitive for Greece as some 300,000 Greeks live in Mariupol and its neighborhood, and they feel safe next to the Orthodox Church, " Defense Minister Panos Kammenos is cited as saying on the Ministry of National Defense website on Wednesday.
Russia is Greece's ally and a friendly country, our countries have "unbreakable ties" of common religion, and we have economic ties as well, the Minister told the Deputy US Defense Secretary Christine Wormuth during their meeting in Washington.
This story showed up on the Russia Today website at 1:51 p.m. Moscow time on their Thursday afternoon, which was 6:51 a.m. EDT in Washington.
On Sunday, following days of heavy fighting against Iraqi government forces, ISIL took control of the Sunni-dominated provincial capital of Ramadi, some 70 miles west of Baghdad.
“No, I don’t think we’re losing,” Obama said in the interview. “There’s no doubt there was a tactical setback, although Ramadi had been vulnerable for a very long time.”
The U.S. president attributed the fall of Ramadi to lack of Iraqi military training and command-and-control structures in Sunni areas of the country.
Hundreds of Iraqi security forces were killed and many more fled, prompting Iraqi Prime Minister Haider al-Abadi to call in Shiite militias to the outskirts of Ramadi to protect the capital and Shiite cities to the south.
This news item, filed from Washington, showed up on the sputniknews.com Internet site at 8:03 p.m. Moscow time on their Thursday evening, which was 1:03 p.m. in Washington. It's courtesy of reader M.A.
Just hours after ISIS scored a significant victory in Iraq when it captured the town of Ramadi over the weekend, the first Iraqi town that had been actively defended by the US as opposed to just Iraqi troops, overnight ISIS also captured the ancient Syrian town of Palmyra, which the mainstream media promptly concludes was proof that the Islamic State's momentum was growing.
Around a third of the 200,000 people living in Palmyra may have fled in the past few days during fighting between government forces and Islamic State militants, the U.N. human rights office said on Thursday.
That's not all: according to Reuters, "extending its reach in the region, fighters loyal to the Sunni Muslim group have also consolidated their grip on the Libyan city of Sirte, hometown of former leader Muammar Gaddafi."
"ISIL has reportedly been carrying out door-to-door searches in the city, looking for people affiliated with the government. At least 14 civilians are reported to have been executed by ISIL in Palmyra this week," Shamdasani said in e-mailed comments.
This Zero Hedge article showed up on their website at 3:53 p.m. on Thursday afternoon---and it's the second contribution in a row from reader M.A.
China and Brazil have unveiled multi-billion dollar trade, finance and investment deals as Premier Li Keqiang kicked off his first official trip in Latin America this week.
Landing first in Brazil, Li saw a raft of agreements signed, ranging from a $1 billion purchase of passenger jets made by Brazil’s Embraer to the lifting of an import ban on Brazilian beef. Infrastructure investment plans also include a controversial project to build a railroad that would slice across the Amazon and the Andes mountain range.
“A new road to Asia will open for Brazil, reducing distances and costs, a road that will take us directly to the ports of Peru and, across the Pacific Ocean, China,” President Dilma Rousseff said in reference to the rail link, inviting Chinese companies to build it.
“China wants to build the railway equivalent of the Panama Canal in the region,” Jean-François Dufour, president of the DCA Chine-Analyse consulting company, told FRANCE 24.
This news item was posted on the france24.com Internet site on Wednesday sometime---and my thanks go out to Roy Stephens for his final offering in today's column.
This audio interview with Jim runs for 57 minutes. It's his monthly chat with the folks over at the Physical Gold Fund. It was recorded on Monday---and I thank Harold Jacobsen for sending it along yesterday.
The Chicago Mercantile Exchange is developing a European gold futures contract to serve customers in London, three sources familiar with matter said, which could present a direct challenge to London's traditional cash market.
The contract would mirror existing futures traded on CME's New York COMEX platform, which has a 100-ounce contract size and typically trades volumes of between 15 million and 20 million ounces daily.
That is the world's most liquid gold contract, essentially setting the benchmark for bullion futures globally.
"The CME has been working on a loco (deliverable in) London futures contract for a while," one source familiar with the matter said. "Comex futures are deliverable at Comex warehouses, but instead with London futures you would take delivery at your London vault. Potentially they would see a lot more futures being delivered if customers could have London gold."
I must admit that I wasn't happy to see this story, so I fired it off to Ted Butler----and here is his response---"A little known fact is that the vast majority of al the new contracts introduced by the CME fail miserably. I would put this contract in that category, but time will tell." This Reuters piece, filed from London, appeared on their website at 4:23 p.m. BST yesterday afternoon London time--and I found it embedded in a GATA release.
Gold buying was slow this week in Asia even as global benchmark prices dropped from a three-month high, with the Chinese hooked on surging equities while demand in India stayed weak and was unlikely to pick up as the wedding season cools.
Premiums for bullion over international spot prices dropped in Hong Kong while prices in India were on par with the global benchmark.
"Demand is extremely slow. Customers are focusing on equity markets and aren't really interested in gold for the time being," said Dick Poon, general manager at Heraeus Precious Metals in Hong Kong.
Gold premiums in Hong Kong dropped to around 50 cents an ounce, he said, from over a dollar last week.
Considering the frantic pace that gold is being imported into both India and China, one wonders how seriously this story should be taken. This Reuters article, filed from Singapore, appeared on their website at 11:06 a.m. IST on their Friday morning---and it's something I found on the Sharps Pixley Internet site at 2 a.m. EDT.
Gold researcher and GATA consultant Koos Jansen outlines the arguments for and against thinking that the People's Bank of China obtains gold through the Shanghai Gold Exchange, a determination critical to estimating how much metal has been brought into the country's gold reserves.
Jansen is inclined to think that the central bank is obtaining its gold outside the exchange and outside "visible" channels, since government purchases of gold can be the most sensitive state secrets. Jansen's very long commentary is headlined "PBOC Gold Purchases: Separating Facts from Speculation" and it was posted on the bullionstar.com Internet site yesterday. I thank Chris Powell for the introductory paragraphs above.
Six of the world's biggest banks will pay $5.8 billion and five of them agreed to plead guilty to charges tied to a currency-rigging probe as they seek to wind down almost half a decade of enforcement actions.
Citicorp, JPMorgan Chase & Co., Barclays Plc, and Royal Bank of Scotland Plc agreed to plead guilty to conspiring to manipulate the price of U.S. dollars and euros in settlements with the Justice Department announced in Washington today. The main banking unit of UBS Group AG agreed to plead guilty to charges related to interest-rate manipulation. The Swiss bank, the first to cooperate with antitrust investigators, was granted immunity in the currency probe.
The four banks that agreed to plead guilty to currency charges are among the world's biggest foreign-exchange traders. They were accused of colluding to influence benchmark rates by aligning positions and pushing transactions through at the same time. Traders who described themselves as members of "The Cartel" used online chat rooms to discuss their positions in the minutes before the rates were set, the Justice Department said.
That leaves only the precious metal markets that JPMorgan et al haven't been been found guilty of rigging, but you know that they're doing it, even if they're never found guilty of it. This Bloomberg story appeared on their Internet site at 8:00 a.m. Denver time yesterday morning---and I found it embedded in a GATA release. The New York Times spin on this, courtesy of Roy Stephens, is headlined " Rigging of Foreign Exchange Market Makes Felons of Top Banks". BUT NOBODY'S GOING TO JAIL!!! And until that happens, this will never end.
Bond yields are leaking higher, The U.S. Dollar is flat (but noisy), but with no macro data to spark a momo run, U.S. equities have tumbled out of the gate... especially Dow Transports. Dow and S&P are back to unchanged on the week...
BTFD? Well we are sure the FOMC Minutes will be spun dovishly.
Trannies are in trouble again - Down 6% YTD... worst start to a year since 2009
This story appeared on the Zero Hedge website less than twenty minutes after the equity markets opened yesterday---and it's courtesy of Dan Lazicki. The two embedded charts are worth a glance.
Thanks to the spoofing, stocks soared to record highs after the FOMC Minutes to prove that everything is awesome---but then CNBC broke the news that BEA will double-seasonally-adjust GDP data - implicitly enabling Q1 to look better and thus giving Janet more room to hike in June - and stocks sunk...
The bottom line: stocks were so obviously manipulated higher today after FOMC to prove the Fed is right it was disgusting... not just the actual indications of spoofing but the fact that stocks entirely decoupled from the "DEADNESS" of every other asset class after the minutes hit.
Then when BEA hit with their agreement over double-seasonal-adjustments, the farce was complete, stocks tanked on the bad news.
This chart-filled commentary from Zero Hedge showed up four minutes after the closing bell yesterday---and it's worth a minute of your time. It's also the second offering in a row from Dan Lazicki.
The San Francisco Fed decided that the weak Q1 GDP data simply needed to be seasonally adjusted (again) in order to make it ...well, less weak.
The official estimate of real GDP growth for the first three months of 2015 was shockingly weak. However, such estimates in the past appear to have understated first-quarter growth fairly consistently, even though they are adjusted to try to account for seasonal patterns. Applying a second round of seasonal adjustment corrects this residual seasonality. After this correction, aggregate output grew much faster in the first quarter than reported.
Got that? There was still some "residual seasonality" (i.e. the data still looked weak) in the Q1 print after the first round of seasonal adjustments, so in order to "correct" things, a second round of seasonal adjustments needs to be applied, after which the new figures should show that the economy did not in fact flat-line in the first three months of the year. Of course if the numbers still don't come out looking the way you want them, you can always rinse and repeat. As we put it two days ago:
And if the double seasonally adjusted data doesn't work? Why triple adjust it, then quadruple adjust it, until you get precisely the goalseeked number you want, as US economic "data" promptly devolve to a level of ridiculousness that will make even the Chinese Department of Truth turn green with envy.
Sure enough, just moments ago, CNBC's Steve Liesman (who else) reports that the double seasonal adjustments are indeed in the works.
Well, dear reader, things are just getting more outrageous all the time. This is another Zero Hedge article from Wednesday afternoon that's courtesy of Dan Lazicki.
No lesser establishment economist than Martin Feldstein - Professor of Economics at Harvard University and President Emeritus of the National Bureau of Economic Research - has some warning words of wisdom for The Fed today: "...the Fed’s unconventional monetary policies have also created dangerous risks to the financial sector and the economy as a whole." When even The Ivory Tower is losing faith, you know The Fed is in trouble...
This commentary by Feldstein was embedded in another Zero Hedge piece from yesterday---and it's also courtesy of Dan L.
How many times have you heard the phrase “bond bubble” in the past three years?
It seems that every time you turn on financial television or go to a financial website, there’s an analyst warning you about a bond bubble about to burst. The commentary usually consists of the observation that “interest rates are near an all-time low” and “have nowhere to go but up.”
There’s not much more to the analysis than that. In fact, interest rates are near all-time highs and could drop significantly, setting off one of the greatest bond market rallies in history.
Allow me to explain…
This commentary by Jim appeared on the dailyreckoning.com Internet site yesterday sometime---and it's another contribution from Dan Lazicki. [Note: Jim says that "Russia invaded Crimea in 2014". They did not. Crimea voted over 90 percent to return to Russia from whence they came, after being "gifted" to the Ukraine by Khrushchev in 1954 - Ed]
According to the latest CAT retail sales data, Caterpillar has now reported an unprecedented 29 months of declining global retail sales, with the month of April seeing a 16% Y/Y collapse in China (after a 25% plunge in 2014 and a 20% plunge the year before), while Latin America just suffered an epic 44% Y/Y crash, the biggest going back to 2009, after a 28% drop the year before.
Or as far as the industrial and heavy equipment bellwether is concerned, the emerging markets (or BRICS) are in an unprecedented economic collapse.
To put Caterpillar's ongoing second great depression in context, during the Great Financial Crisis, CAT suffered "only" 19 months of consecutive retail sales declines. As of April 2015, this number is now 29, and there is no hope in sight of seeing an annual rebound any time soon.
This short Zero Hedge article appeared on their Internet site at 10:55 a.m. EDT on Wednesday morning---and it's definitely worth your time. This is the real economy talking. Once again I thank Dan Lazicki for finding it for us.
Presidential hopeful Sen. Rand Paul is speaking from the Senate floor Wednesday in what he is calling a filibuster of extending the Patriot Act.
"I will not let the Patriot Act, the most unpatriotic of acts, go unchallenged," Paul said. "The bulk collection of all Americans' phone records all of the time is a direct violation of the Fourth Amendment."
Paul's hours-long speech also marks a potentially savvy political move, allowing the Kentucky Republican, and his presidential campaign, to dominate the media spotlight for hours Wednesday afternoon.
Paul brushed aside criticisms from his colleagues that letting the Patriot Act expire would threaten national security.
"Couldn't we just for a couple of hours live under The Constitution?" he asked.
This commentary was posted on thehill.com website at 2:03 p.m. EDT yesterday afternoon---and the stories from Dan just keep on coming.
The euro fell to a two-week low on Wednesday following a Greek government warning that it will miss the June 5 IMF payment deadline without a deal with the Troika by then.
The single currency traded at $1.1115, down 0.4 percent at 11:36 a.m. MSK on Wednesday. It declined 0.71630 against the British pound and 134.34 against the Japanese yen.
“Now is the moment that negotiations are coming to a head. Now is the moment of truth, on June 5. If there is no deal by then that will address the current funding problem, they won’t get any money.”
The country owes more than €320 billion to its external creditors, and is counting on a €7.2 billion International Monetary Fund loan installment. Last week the country raided its International Monetary Fund reserves for a €750 million debt payment to the IMF.
This news item appeared on the Russia Today website at 11:45 a.m. Moscow time on their Wednesday morning, which was 4:45 a.m. EDT in Washington. I thank Roy Stephens for sending it along.
The U.S. seems to admit it overplayed its hand over Ukraine. Caving to reality is actually the best possible policy.
It is just as well Secretary of State John Kerry’s momentous meetings with Russian leaders last week took place in Sochi, the Black Sea resort where President Putin keeps a holiday home. When you have to acknowledge that two years’ worth of pointless hostility in the bilateral relationship has proven none other than pointless, it is best to do so in a far-away place.
Arriving in the morning and leaving in the afternoon, Kerry spent three hours with Sergei Lavrov, Russia’s very competent foreign minister, and then four with Putin. After struggling with the math, these look to me like the most significant seven hours the former senator will spend as this nation’s face abroad.
Who cannot be surprised that the Obama administration, having turned the Ukraine question into the most dangerous showdown since the Cold War’s worst, now declares cordiality, cooperation and common goals the heart of the matter?
The question is not quite as simple as one may think.
This commentary falls into the absolute must read category for any serious student of the New Great Game---and is the only absolute must read in today's column. I was going to save it for Saturday for length reasons, but after having read it myself, I though it best to insert it into today's missive. It was posted on the salon.com Internet site on Tuesday at 5 p.m. Denver time---and I borrowed the above headline from David Stockman's reposting of it. The actual headline reads "John Kerry admits defeat: The Ukraine story the media won’t tell, and why U.S. retreat is a good thing"---and I thank Roy Stephens for bringing it to my attention---and now to yours.
Obama has thrown in the sponge for Ukraine, Eric Zuesse underscored, adding that Washington is now "on-board with the ‘Plan B’ for Ukraine," which means implementing the provisions of the Minsk II accord.
International media have failed to highlight the ultimate failure of Washington's policy in Ukraine, investigative historian Eric Zuesse emphasized, referring to remarks by U.S. Secretary of State John Kerry in response to Petro Poroshenko's oath to retake Crimea and the Donetsk Airport.
"I have not had a chance – I have not read the speech. I haven't seen any context. I have simply heard about it in the course of today [which would be shocking if true]. But if indeed President Poroshenko is advocating an engagement in a forceful effort at this time, we would strongly urge him to think twice not to engage in that kind of activity, that that would put Minsk in serious jeopardy. And we would be very, very concerned about what the consequences of that kind of action at this time may be," John Kerry said during a press conference in Sochi, as cited by the historian.
Eric Zuesse stressed that the remark has clearly demonstrated that the Obama administration has thrown in the towel on Washington's original plan for Ukraine, which was purportedly aimed at an all-out military invasion of the eastern regions.
This news story, filed from Moscow, showed up on the sputniknews.com Internet site at 7:26 p.m. Moscow time on their Wednesday evening---and it's certainly worth reading. I thank Roy Stephens for his second article in a row.
Russia will appeal to the International Court of Justice if Ukrainian President Petro Poroshenko signs a moratorium on the payment of Ukraine’s external debt into law and fails to pay its debt to Russia, said Russian Finance Minister Anton Siluanov.
Siluanov said Ukraine was virtually defaulting on its debt, adding that Russia doesn’t yet have grounds to lodge any claims. If Kiev fails to pay $75 million in June, Moscow will use its right to appeal to the court, the Minister said.
The Ukrainian parliament has adopted a law allowing the country not to pay foreign debt to private lenders, saying it needs to protect the ailing economy and people from “unscrupulous” creditors.
The bill says the $3 billion in Ukrainian Eurobonds purchased by Russia at the end of 2013 are on the list of liabilities subject to a possible payment moratorium.
This article put in an appearance on the Russia Today website at 11:01 a.m. Moscow time yesterday morning---and I thank Roy Stephens for sharing it with us.
A report says manufacturing in China shrank for the third month in a row in May as demand remained soft, raising the chances of further stimulus from Beijing.
The preliminary version of HSBC's purchasing managers' index came in at 49.1. That's slightly better than the 48.9 recorded in April but still in contractionary territory on the 100-point index. Numbers above 50 indicate expansion.
The report said that factory production decreased from last month's no-change level, falling to its lowest in 13 months.
This short AP story ended up on the abcnews.go.com Internet site at 10:35 p.m. EDT Wednesday evening---and I thank West Virginia reader Elliot Simon for digging it up for us. It's worth a quick read.
As the United States struggles to maintain influence in the South China Sea, it has pushed Pacific nations to assert themselves against Beijing. In that effort, Washington organized a gathering of military leaders from over 20 countries, specifically excluding China.
A first-of-its-kind event, the United States hosted the PACOM Amphibious Leaders Symposium in Hawaii for Pacific nation commanders to discuss amphibious military capabilities. In attendance are representatives from Japan, Australia, the Philippines, Malaysia, Vietnam, and many others.
During the event, military leaders were flown aboard the USS Essex and given a demonstration of the U.S. Marines amphibious assault capabilities.
This news item appeared on the sputniknews.com Internet site at 2:16 a.m. Moscow time on their Thursday morning, which was 7:16 p.m. Wednesday evening in Washington. Once again I thank Roy Stephens for sending it our way.
Given the recent resurgence of precious metals and the looming 'endgame' of Federal Reserve faith, we thought dusting off the following 160 seconds of uncomfortable truth from Bridgewater's Ray Dalio was worthwhile...
"We're beyond the point of being able to successfully manage this... and I worry about another leg down in the economy causing social disruption... Hitler came to power in 1933 because of the social tension between the factions."
"Gold should be a part of everybody's portfolio to some degree because... it is the alternative money. Warren Buffett is making a big mistake."
This 2:40 minute video clip is of unknown age, as the opening paragraph states "dusting off"---but it certainly is worth watching if you haven't seen it before, which I hadn't. I thank Dan Lazicki for his final contribution to today's column.
Gold is a regarded as a hedge against market turbulence by Bank of America who, in a note to clients, advised holding gold and paper currency at this time.
Bloomberg report that Bank of America Merrill Lynch describe the markets as being in a “Twilight Zone” – the zone between the end of QE and the Fed beginning to raise rates to try to bring normality back into the markets.
To deal with this they advocate adding gold to one’s portfolio along with higher levels of cash. Citing factors such as liquidity, profits, technological disruption, regulation, and income inequality they say there exists a potential for a “cleansing drop in asset prices.”
This commentary appeared in Mark O'Byrne's column over at the goldcore.com Internet site yesterday---and it's certainly worth skimming.
UBS Group AG won immunity from criminal fraud charges in a Justice Department investigation into misconduct in the trading of precious metals.
The Swiss bank’s main UBS AG unit won’t be charged by the department’s criminal division for information the firm disclosed to prosecutors about precious-metals transactions, according to the company’s plea agreement released on Wednesday to resolve a probe into interest-rate manipulation.
Prosecutors have been investigating whether at least 10 banks, including Barclays Plc, JPMorgan Chase & Co. and Deutsche Bank AG, manipulated prices of precious metals such as silver and gold, Bloomberg reported in February. The scrutiny follows international probes into the rigging of financial benchmarks for rates and currencies, which have yielded billions of dollars in fines.
This Bloomberg news item was posted on their website at 1:01 p.m. yesterday afternoon Denver time---and I found it on the Sharps Pixley website in the wee hours of this morning.
A proposal in India to attract thousands of tonnes of gold owned by households into a bank deposit scheme will likely fail in its current form as it does not address some key concerns for banks and consumers.
Support from banks would be crucial for the success of the monetisation plan. Deposit schemes, similar to the one proposed on Tuesday by the Narendra Modi-led government, have previously failed as the incentives offered were not profitable for banks.
The idea is to attract gold lying idle among Indian homes into the banking system. This amounts to an estimated 20,000 tonnes of gold -- or almost seven times global annual output.
This gold-related Reuters article, co-filed from Singapore and Mumbai, was posted on their website at 9:24 a.m. EDT on Wednesday morning. It's actual headline is "India's gold monetisation plan lacks lustre - industry"---and I found it in another GATA release. It's not overly long---and it's worth reading, as it goes hand-in-hand with the other stories on this issue that appeared in my Wednesday column.
A move to a gold standard in China would require an exchange rate of as much as $64,000 an ounce, 50 times bullion's price now, according to Bloomberg Intelligence.
A traditional gold standard, in which the precious metal backs the currency, is basically impossible at current prices due to the amount of metal needed and there's no evidence that the sixth-biggest bullion holder will adopt one, Bloomberg Intelligence said in reports published today. Any attempt probably would involve new technologies and depend on the ratio of what is backed, it said.
Chinese policy makers are trying to establish the yuan as a reserve currency, and backing it with gold would help attract foreign capital inflows, the Bloomberg research unit wrote. Theoretically, to create an exchange rate of one ounce of gold for every $64,000, the country would need about 10,000 metric tons of the metal, they estimated. That's nine times the nations official holdings and about 6 percent of all the bullion ever mined globally.
Well, dear reader, I don't know about you, but I'd be happy with a gold price five times what it is now. This Bloomberg article showed up on their Internet site at 5:16 a.m. MDT yesterday morning---and I found it on the gata.org Internet site.
I listened today (20th May) to an exceedingly interesting presentation by Ken Hoffmann, Bloomberg’s Global Head of Metals & Mining Research at the very well attended Global Mining Finance Precious and Base metals event in London. The talk was entitled ‘China: Brace for a hard landing and a new ‘Gold Standard’ and related to research conducted by Bloomberg analysts which was only released about half an hour earlier than the talk.
While Hoffmann may not have answered the question posed by the talk title directly, and a ‘gold standard’ in the old sense may not be realistic given that to back the yuan physically with gold would require either more gold than the world has ever produced (at the current price levels) or perhaps if China can accumulate 10,000 tonnes of gold, a gold price of $64,250 an ounce would be required. (China currently has official holdings of 1,054 tonnes as reported to the IMF, but is widely believed to have accumulated far more held in separate accounts not yet reported to the IMF. Bloomberg analysts suggested it might have an additional 2,500 tonnes in such accounts – others put the figure rather higher, but until and unless China comes clean with a ‘true’ figure we just don’t know – and even then we may still not know for sure given the somewhat opaque nature of Chinese government statistics).
Lawrie has a go at the Bloomberg story posted above---and this very interesting commentary of his is worth your while. It was posted on the mineweb.com Internet site at 4:22 p.m. BST in London yesterday---and the first reader through the door with it was Roy Stephens.
China is planning to introduce the gold fixing reference price in yuan. Americans fear that China could introduce a new gold standard to displace the dollar, DWN reported.
The competition for London gold-market has grown after the Chinese Shanghai Gold Exchange (SGE) established an International Chamber of Commerce in the free trade zone of the city, providing for free capital flows, Deutsche Wirtschafts Nachrichten reported.
China is the world's largest gold producer and is, logically, interested in the possibility to influence the determination of the gold price.
According to a market participant, China will have its fixing price before the end of the year, with the country experiencing a rapid development of its gold market, Financial Times reported.
This is another interesting article on the same issue---and it seems to have come out entirely independently of the above two stories. This one appeared on the sputniknews.com Internet site at 4:37 p.m. Moscow time on their Wednesday afternoon, which was 9:37 a.m. EDT in New York. It's the final offering of the day from Roy Stephens, for which I thank him.
Following two ugly months of dramatically missed expectations, Housing Starts exploded to 'recovery' highs (highest since Nov 2007) jumping 20.2% MoM to 1.135million (against 1.015 exp.). This is the 2nd biggest MoM jump in history.
Both single-family (3rd biggest MoM surge since the crisis peak) and multi-family starts surged. Permits also surged in April (jumping 10.1% MoM - the most since 2012) to 1.143 million (well above expectations) and the highest since June 2008. and Well these huge mal-investment spikes make perfect sense in light of the collapse in lumber prices (and thus demand).
This chart-filled Zero Hedge piece from 8:40 a.m. EDT on Tuesday morning is worth running through---and I thank reader M.A. for today's first story.
Maybe, just maybe, this whole bond rout is ending.
The global sell-off that’s set investors on edge finally slowed last week, and some analysts are saying the worst is over. Treasuries look fairly valued given the outlook for inflation and interest rates, according to Bank of America Corp. -- although with plenty of caveats. In Germany, options traders convinced a bund-market crash was all but inevitable less than two weeks ago have scaled back most of those bets.
Goldman Sachs Group Inc. warns that government debt is still expensive, but a growing number of investors are finding value after the four-week exodus sent yields soaring. Prudential Financial Inc.’s Robert Tipp is buying because tepid U.S. growth will keep the Federal Reserve on hold, while Europe remains too weak to sustain higher yields.
“There’s a good chance people will look back at this as having been a good buying opportunity,” Tipp, the chief investment strategist at Prudential’s fixed-income unit, which manages $560 billion, said from Newark, New Jersey.
This Bloomberg article from Sunday afternoon Denver time was something I found in yesterday's edition of the King Report.
I’ve Read Obama’s Secret Trade Deal. Elizabeth Warren Is Right to Be Concerned.
"You need to tell me what’s wrong with this trade agreement, not one that was passed 25 years ago,” a frustrated President Barack Obama recently complained about criticisms of the Trans Pacific Partnership (TPP). He’s right. The public criticisms of the TPP have been vague. That’s by design—anyone who has read the text of the agreement could be jailed for disclosing its contents. I’ve actually read the TPP text provided to the government’s own advisers, and I’ve given the president an earful about how this trade deal will damage this nation. But I can’t share my criticisms with you.
I can tell you that Elizabeth Warren is right about her criticism of the trade deal. We should be very concerned about what's hidden in this trade deal—and particularly how the Obama administration is keeping information secret even from those of us who are supposed to provide advice.
So-called “cleared advisers” like me are prohibited from sharing publicly the criticisms we’ve lodged about specific proposals and approaches. The government has created a perfect Catch 22: The law prohibits us from talking about the specifics of what we’ve seen, allowing the president to criticize us for not being specific. Instead of simply admitting that he disagrees with me—and with many other cleared advisers—about the merits of the TPP, the president instead pretends that our specific, pointed criticisms don’t exist.
I posted a story about this in my Saturday column, I believe---but here's the Zero Hedge take on it---and it's definitely worth reading. I thank Dan Lazicki for sharing it with us.
Britain’s inflation rate fell below zero for the first time in more than half a century, as the drop in food and energy prices depressed the cost of living.
Consumer prices declined 0.1 percent in April from a year earlier, the Office for National Statistics said in London on Tuesday. Economists had forecast the rate to be zero, according to the median of 35 estimates in a Bloomberg News survey. Core inflation slowed to 0.8 percent, the lowest since 2001.
With inflation so far below the Bank of England’s 2 percent target, policy makers are under little immediate pressure to raise the key interest rate from a record-low 0.5 percent. Governor Mark Carney said last week that any period of falling prices will be temporary and an expected pickup in inflation at the end of the year means the next move in borrowing costs is likely to be an increase.
“For now, it represents an obstruction to a BOE rate hike,” said Alan Clarke, an economist at Scotiabank in London. “Enjoy it while it lasts because there is a good chance that inflation will be back in positive territory next month.”
This Bloomberg article showed up on their Internet site at 2:30 a.m. Denver time yesterday morning---and I thank West Virginia reader Elliot Simon for finding it for us.
Europe faces the risk of a second revolt by Left-wing forces in the South after Portugal’s Socialist Party vowed to defy austerity demands from the country’s creditors and block any further sackings of public officials.
"We will carry out a reverse policy,” said Antonio Costa, the Socialist leader.
Mr Costa said a clear majority of his party wants to halt the “obsession with austerity”. Speaking to journalists in Lisbon as his country prepares for elections - expected in October - he insisted that Portugal must start rebuilding key parts of the public sector following the drastic cuts under the previous EU-IMF Troika regime.
The Socialists hold a narrow lead over the ruling conservative coalition in the opinion polls and may team up with far-Left parties, possibly even with the old Communist Party.
This Ambrose Evans-Pritchard commentary put in an appearance on the telegraph.co.uk Internet site at 6:00 p.m. BST yesterday evening, which was 1:00 p.m. in Washington. I thank South African reader B.V. for bringing it to our attention.
German Chancellor Angela Merkel is considering delivering a keynote address to make the case for aiding Greece as she faces down a potential revolt from as much as a third of her bloc’s lawmakers.
Merkel would hold the speech after Greece and its creditors agree on a deal with conditions she deems strong enough to sell to parliament and the German public, according to two government officials. She would argue that a Greek exit from the euro area would risk causing geopolitical instability in the region, said the officials, who asked not to be identified because the discussions are private.
Merkel’s desire to keep Greece in the euro is fraught with political risk given the level of exasperation in Germany with Prime Minister Alexis Tsipras after four months of brinkmanship. While some German policy makers have hardened their stance against helping Greece, others are hinting at more flexibility to avert a financial collapse.
“Should we seriously go and prescribe in detail what the Greeks are allowed to spend and what revenue they can have?” Deputy Finance Minister Thomas Steffen said in an interview. “I say no. It’s the rough framework that has to be clear.
This is the Zero Hedge spin on an embedded Bloomberg story from very early yesterday morning MDT---and it's worth reading. It's another offering from Dan Lazicki.
The gridlock over the country's eurozone future is resulting in record numbers of lost jobs and a destruction in growth potential, according to figures from the Hellenic Confederation of Commerce and Enterprise (ESEE),
Since Syriza took office in late January, an average 59 small businesses have shut up shop, with approximately 613 jobs destroyed every single day, say ESEE.
Having suffered from the worst depression in the developed world since the 1930s - losing a quarter of its output - Greece's renewed political crisis has shattered the fragile business confidence in the country.
More than a third of all bank loans are now classed as "bad" (or non-performing), while the ESEE notes that more than 95pc of all applications for bank loans are rejected every day.
This news item was posted on The Telegraph's website at 1 p.m. London time on their Tuesday afternoon---and I thank Roy Stephens for sending it along. It's worth reading.
Ukraine’s parliament on Tuesday handed ministers the power to suspend foreign debt payments to defend against “unscrupulous” creditors.
The vote was the latest episode in an escalating row over a $25bn (£16bn) rescue package with the International Monetary Fund and European Union.
“In case of attacks on Ukraine by unscrupulous creditors, this moratorium will protect state assets and the state sector,” the prime minister Arseniy Yatsenyuk said.
Finance minister Natalie Jaresko said the overwhelming vote in the Rada, allowing the government to suspend payments to Ukraine’s international sovereign debt-holders, was “an important protection for citizens who are already shouldering a heavy burden due to the war in the east”.
This story showed up on theguardian.com Internet site at 8:22 p.m. BST yesterday evening, which was 3:22 p.m. in New York. The Bloomberg spin on this news item is headlined "Ukraine Piles Pressure on Creditors Payment-Delay Powers"---and both are courtesy of Jim Skinner.
So a woman walks into a room… That’s how quite a few jokes usually start. In our case, self-appointed Queen of Nulandistan Victoria “F**k the E.U.” walks into a room in Moscow to talk to Russian deputy foreign ministers Sergei Ryabkov and Grigory Karasin.
A joke? Oh no; that really happened. Why?
Let’s start with the official reactions. Karasin qualified the talks as "fruitful", while stressing Moscow does not approve of Washington becoming part of the Normandy-style (Russia, Ukraine, Germany and France) negotiations on Ukraine. Not after the relentless demonization not only of the Kremlin but also of Russia as a whole since the Maidan coup.
Ryabkov, for his part, made it known the current state of the US-Russia relationship remains, well, corrosive.
This very interesting commentary by Pepe certainly falls into the must read category for any serious student of the New Great Game. It appeared on the sputniknews.com website at 4:28 p.m. Moscow time on their Tuesday afternoon---and I thank U.K. reader Tariq Khan for sending it our way.
So, Warren Buffett comes with his own railroad. That means he has his own pipeline. So, Warren Buffett’s a guy who’s dumping paper money, getting into hard assets in the form of transportation and energy in particular. And the dollar could go to zero and it has no effect on him. He still owns a railroad
The other example are the Chinese. The Chinese have spent the last four years acquiring approximately 3,000 to 4,000 tons of gold. Now, how do we know that? We have some hard data. We know China’s mining output is about 450 tons a year. We know China’s imports through Hong Kong are coming in between 800 and 1,000 tons a year. This has been going on for four years so that’s kinda 6,000 tons there and where you have to use a little guesswork is okay, we know how much gold China is getting, how much is going to private consumption, how much is going to the government? We’re not as clear on that, but I use kinda half as the first approximation.
The gold is gonna go up like this so they’ve created a hedge where they win this way and they win this way so I would say look at China buying gold, look at Warren Buffett buying hard assets in energy and that will give some guidance. The two other ones, powerful, biggest, best and foreign investors in the world are getting out of paper money into hard assets.
This commentary by Jim is a rehash of what he's said before. However, there is some new material in it, so it's still worth reading---and I thank Dan Lazicki for his final offering in today's column.
Hugo Stinnes is practically unknown today, but this was not always the case.
In the early 1920s, he was the wealthiest man in Germany at a time when the country was the world's third-largest economy. He was a prominent industrialist and investor with diverse holdings in Germany and abroad.
Chancellors and Cabinet ministers of the newly formed Weimar Republic routinely sought his advice on economic and political problems. In many ways, Stinnes played a role in Germany similar to the one Warren Buffett plays in the U.S. today…
He was an ultra-wealthy investor whose opinion was eagerly sought on important political matters, who exercised powerful behind the-scenes influence, and who seemed to make all the right moves when it came to playing markets.
This commentary by Jim Rickards showed up in the Casey Research publication "On The Radar"---and it's also worth your time.
Yearning for sunnier skies for your gold investments? How’s this sound…
That’s not pie in the sky wishful thinking—it accurately describes the next stage of the gold market, something that will soon visit your portfolio.
I'm hoping that Jeff has the inside track from Jamie Dimon, as it will be up to him [et al] if this comes to fruition. But like you, dear reader, I'm praying he'll be right. This commentary by Jeff showed up on the Casey Research website yesterday.
India will allow citizens to deposit gold with banks to earn interest as the world's second-biggest consumer seeks to cut reliance on imports by tapping idle bullion lying with households.
Individuals and institutions can deposit a minimum of 30 grams in the form of bullion or jewelry under a so-called gold monetization scheme, according to a draft document released by the government today. The banks can set the interest rate on the deposits and the metal mobilized may be loaned to jewelers, the government said.
Success in drawing out a part of the more than 20,000 metric tons of gold lying with households and institutions like temples may help India lower dependence on imports and ease pressure on the current-account deficit. While the plan proposes to ensure steady supply of bullion to jewelers, banks may benefit from a new business in a country where gold is bought during festivals and marriages as part of the bridal trousseau or given as a gifts in the form of ornaments.
The monetization plan will be limited to select cities initially as it requires a vast setup of infrastructure for secure handling of gold, according to the draft plan. Customers will have the option of redeeming deposits either in cash or in gold with a minimum tenure of one year. Investors may be exempted from paying capital gains tax, wealth tax, and income tax, the draft showed.
Good luck getting this up and running! This very interesting Bloomberg story is a must read. The above headline is courtesy of GATA's Chris Powell, but the real headline states "India Moves a Step Closer to Tapping 20,000-Tonne Gold Hoard". It was posted on the gata.org Internet site at 3:19 MDT yesterday morning.
The moot question is will the inhibitions that marred the earlier gold deposit scheme vanish. The answer sadly is in the negative.
The metal would be melted as hitherto much to the dismay and chagrin of women folk, to whom melting mangal sutra for example is abshagun, inauspicious and a strict no-no. That our ladies routinely lose out to the wicked jewelers on account of wastage but are finicky about melting on sentimental grounds need not detain us.
The tax exemptions mean a lot for those in the 30% income tax bracket as it would heighten the post-tax return on investments but temples and shrines like Tirumala Tirupati Dewastanam (TTD), Shirdi Sai Baba Trust, Mata Vaishneo Devi trust etc. are in any case tax-exempt.
And there is no guarantee that tax sleuths will not come calling hot on deposit, asking for the source, the irritant that bedeviled the earlier schemes as well.
Black money in this country finds sanctuary in real estate and gold. Gold has never come tumbling out of cupboards, lofts, and lockers enticed by interest, which pales before the tax consequences.
This extremely interesting article showed up on the firstpost.com Internet site at 8:15 a.m. India Standard Time [IST] on their Wednesday morning---and it's also worth reading. I found it on the gata.org Internet site just before midnight Denver time last night.
The past three years have seen a concerted effort by producing gold miners to cut costs but has this now run its course with all those costs that are within the control of the mining companies already slashed perhaps as far as they can be? Indeed over the past year, the miners have been able to claim falling costs primarily through beneficial factors outside their own control.
Think on it. Much of the actual cost cutting over the past two to three years has come from dropping capital projects, reducing exploration expenditures, laying off surplus staff, cutting out layers of administration and a small amount from improvements in mining technology. Disposals of less profitable operations to leaner and meaner rivals and the closure of the least economic mines have also been playing their part in company boards being able to point to better cost figures all round. These figures have also been enhanced by mining to higher grades - thus producing more gold without increasing basic operating procedures, so costs per ounce of gold produced have appeared to fall as a consequence. But are these measures at the expense of mine lives, new project development and overall longer-term corporate viability?
Take nearly all these factors. Reducing exploration expenditures and cutting back on capital projects is bound to affect the longer-term potential of the company making the cuts. High grading reduces overall ore reserves and mineral resources. The only real 'cost cuts' are those achieved via permanent labor and administration reductions, changes in the mining plan and processing efficiencies to improve figures and the removal of loss making and marginal operations through sale or closure. Once these have been made, one might argue there is little further the companies can do (apart perhaps from reducing some of the over the top pay packages commanded by senior executives, but in truth these have little overall effect on the bottom line for the bigger companies).
This commentary by Lawrie was posted on the seekingalpha.com Internet site early yesterday morning EDT---and it's definitely worth reading.
CME Group Inc said on Monday it would launch a zinc futures contract next month, stepping up a global battle for metals market share with the London Metal Exchange amid expanding Asian markets.
CME’s announcement, which included a statement from JP Morgan Chase & Co expressing strong support for the move, said the new zinc contract will begin trading June 29. The first available U.S. delivery was targeted for October, pending regulatory reviews, CME said.
The statement did not explain JPMorgan’s role in the zinc contract, but a source familiar with the matter said JPMorgan “absolutely” intends to provide liquidity on the new market, adding to its existing market-making activities on the LME.
CME Group and JPMorgan team up to rig another market. Well, dear reader, "providing more liquidity" is the same reason they use for being involved in the precious metal market---and that "liquidity" JPMorgan [et al] speak of is used to manage prices. The question that begs to be asked is since they neither produce nor consume these metals, why are they there? This Reuters article from yesterday found a home over at the mineweb.com Internet site---and it's worth skimming.